TIOL-DDT 1568 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1568 </font><br> 15.03.2011 <br> Tuesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax on renting of immovable property – ASG's Advice to the FM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court has passed an order to the effect that the High Court of Delhi will hear and dispose of all the writ petitions as expeditiously as possible. Further, the Supreme Court has ordered that the interim order which was passed by the Supreme Court on 10.1.2011 would continue to operate till the disposal of the writ petitions in the High Court. In effect, the interim order, dated 18.5.2010, passed by the Delhi High Court (post amendments), staying the levy of service tax on renting of immovable property has been nullified. Subsequent to the interim order of Delhi High Court, dated 18.5.2010, a large number of orders were passed by various High Courts, staying the levy of service tax on renting of immovable property till final disposal of WPs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Additional Solicitor General of India has opined that the Union of India is now legally empowered, in view of the Supreme Court order, as mentioned above, to collect service tax on commercial properties until the final judgement of the High Court of Delhi in the post amendments scenario. He has advised the FM that applications may be moved before all the High Courts in India for vacation of interim direction issued in favour of petitioners. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the CBEC directs the field to collect service tax on commercial properties until the final judgement of the High Court of Delhi in the post amendments scenario. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board directs that:- </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Necessary action for filing of application for vacation of interim directions issued in favour of petitioners by various High Courts may please be taken expeditiously. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Necessary steps for collection of pending service tax may also be taken.</font></p> </blockquote> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2011/homesolutions.htm" target="_blank">CBEC Letter F. No. 276/282,2010- CX.8A; Dated: February 24, 2011</a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Renting- Many cases tossed out as tenants are not assessees and hence no locus- standi - Karnataka High Court </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> advocate who is closely connected with this case, informs us: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday, the 14th of March, the High Court of Karnataka was pleased to dismiss WP No. 30344/2010 filed by Devayani International Pvt Ltd, challenging the charge of service tax on renting of immovable property. In this petition, besides UOI, CBEC, Commissioner of Service Tax and the adjudicating authority, all the land lords or lessors had also been impleaded as respondents, and ad interim ex parte stay obtained against recovery of service tax from the tenants. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The dismissal was on the ground of maintainability. Since Devayani International was a tenant / lessee, it was not a service tax assessee. Not being a service tax assessee, it cannot have any grievance against taxability of renting of immovable property. Consequently, it could not maintain the petition challenging for lack of locus standi . Essentially, the petition was perceived as one directed against the land lords or lessors, trying to prevent them from collecting service tax in terms of contract between the parties. Proper remedy for the tenants and lessees in such case was to approach the Civil Court and pray for injunction against land lord / lessor from collecting service tax on rental. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 31.3.2011, another batch of writ petitions will be posted for final disposal before the same Single Judge. Barring a few exceptions, most of them are filed by tenants. Now that a precedent has been created, most of these petitions are also liable to be dismissed as not maintainable. This would not affect the right of land lords and lessors to maintain the petition. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Delhi High Court too is slated to hear the arguments on 21st of March, when Mr. Rakesh Chitkara is to continue arguments, probably followed by ASG Mr. Chandiok and Sr. Govt. Counsel Mr. Mukesh Anand . </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Quantity restriction of 55 lakh bales on export of cotton - Exemption for export of 5000 bales of Assam Comilla; cotton</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has amended DGFT Notification No. 12(RE-2010)/2009-14 dated 16.12.2010, whereby the ‘Nature of Restriction' is amended as, “The contracts for export of cotton shall be registered with the Directorate General of Foreign Trade prior to shipment. During the Cotton Season, 2010-11( upto 30.09.2011) the export of cotton will be subject to a cap of 55 lakh bales or as notified by DGFT from time to time. Clearance of cotton consignments by Customs should be after verifying that the contracts have been registered.” </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, export of 5,000 bales of Assam Comillas Cotton (Tariff Code 5201 00 12) is exempted from the ceiling of 55 lakh bales imposed on export of cotton during the Cotton Season, 2010-11( upto 30.09.2011). Such export will also be required to be registered with DGFT. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The export of cotton is free subject to registration of export contracts with DGFT. The cap on export during the Cotton Season, 2010-11 (01.10.2010 to 30.09.2011) will be 55 lakh bales or as notified by DGFT from time to time. But, export of 5,000 bales of Assam Comillas Cotton (Tariff Code 5201 00 12) is exempted from the cap, but not from registration. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not032.htm" target="_blank">DGFT Notification No. 32(RE-2010)/2009-14 Dated: March 14, 2011 </a></font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Streamlining procedure for scrutiny of income-tax returns </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>APPRECIATING</strong> the concern of the taxpayers and with a view to mitigate their hardships, Central Board of Direct Taxes has reviewed its scrutiny selection procedure. It has been decided that during the financial year 2011-12, cases of senior citizens and small taxpayers, filing income-tax returns in ITR -1 and ITR -2 will be subjected to scrutiny only where the Income Tax department is in possession of credible information. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Senior citizens for this purpose would be individual taxpayers who are 60 years of age or more. Small taxpayers would be individual and HUF taxpayers whose gross total income, before availing deductions under Chapter VIA, does not exceed Rupees ten lakh. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/CBDT_Press_Release.doc" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Press release Dated: March 14, 2011 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Complaints against Secretaries to the GOI – CVC Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CVC</strong> reiterates its earlier instructions that complaints referred by the Commission to the ministries against Secretaries to the Government of India/ CEOs of Public Sector Enterprises/ CMDs of Public Sector Banks are to be dealt with and inquired into and reports submitted to the Commission and the complaints should not be forwarded to the Group of Secretaries. </font></p> <p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/cvc_circular_17.htm" target="_blank">CVC Circular No. 06/03/11 Dated: March 14, 2011 </a></font></strong></p> <p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Jawan using abusive language like ‘ madarchod and behanchod ' common – Experience of life resolves more than the logic of the law – High Court reinstates compulsorily retired jawan </font></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A </strong>senior officer advised a probationer that the lower level staff will not work unless you abuse them with the choicest expletives involving some of their closest female relatives. The young probationer did not understand what his experienced boss was talking about. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi High Court in a recent judgement delivered last week observed, “Experience of life resolves more than the logic of the law. Our experience guides us that the jawans do speak street language while communicating with each other and liberally spice queries with abuses. These abuses are in the form of words “ MADARCHOD ? “ BEHANCHOD ?. Quizzing a jawan as to where was he going, it is not uncommon to hear a jawan say “ BEHANCHOD KAHAN JA RAHA HAI ? or when a jawan returns, the other saying “ BEHANCHOD AA GAYA?. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court reinstated a jawan who had a spat with his superior and was awarded the punishment of compulsory retirement. </font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2011/2011-TIOL-153-HC-DEL-MISC.htm"><strong>Click here for the judgement. </strong></a></font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Wednesday's cases </font></strong></font></strong></font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Service Tax</font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">The consumption of service in India is not taxable event. Situs of tax would be where taxable event occurs and not where effect or consequence thereof is felt.: – CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> taxable event has not occurred in India, inasmuch as the activity of development of technology, technical information & know-how, transfer of design, drawing etc has taken place in USA. The consumption of such services in India, when admittedly no such service stands provided by the appellant in India, cannot be held to be a taxable event. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether exemption u/s 54F can be denied merely because construction of residential house could not be completed before expiry of three year period - NO, says ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Bench is - Whether exemption under section 54F can be denied merely because the construction of residential house was incomplete and could not be completed before expiry of three year period. NO is the Tribunal's answer. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Actual confiscation u/s 113 of Customs Act, 1962 is not imperative for holding a person liable to be penalized under Section 114 of Act - Liability of goods to confiscation is enough - denying DFIA benefit is clearly beyond the jurisdiction of Commissioner of Customs (Export). : CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHEN</strong> the matter was taken up, it was noticed that the Bench had sought information from the Revenue as to whether the subject goods were cleared for export under bond. On asking the Revenue representative as to whether the said information was available, it was submitted that the all the queries in this regard made to the Commissioner of Customs (Export), JNCH , Nhava Sheva had gone unheeded. Noting that the Commissioner concerned had not cared to answer the queries, it was held that adverse inference would be raised against the department inasmuch as the Bench proceeded on the premise that the appellant was not required by the proper officer of Customs to execute any bond or undertaking before the goods were cleared for export. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Time. </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></strong><a href="mailto:vijaywrite@taxindiaonline.com"> </a></font></p> </body> </html>